ID 

Union Calendar No. 476 

114TH CONGRESS 

2D SESSION S. 1109 

[Report No. 114–613] 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 22, 2015 

Referred to the Committee on Oversight and Government Reform 

JUNE 9, 2016 

Committed to the Committee of the Whole House on the State of the Union 

and ordered to be printed 

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A BILL 

To require adequate information regarding the tax treatment 

of payments under settlement agreements entered into 

by Federal agencies, and for other purposes. 

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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Truth in Settlements 

5 Act of 2015’’. 

6 SEC. 2. INFORMATION REGARDING SETTLEMENT AGREE7 MENTS ENTERED INTO BY FEDERAL AGEN8 CIES. 

9 (a) REQUIREMENTS FOR SETTLEMENT AGREE10 MENTS.— 

11 (1) IN GENERAL.—Chapter 3 of title 5, United 

12 States Code, is amended by adding at the end the 

13 following: 

14 ‘‘§ 307. Information regarding settlement agreements 

15 ‘‘(a) DEFINITIONS.—In this section— 

16 ‘‘(1) the term ‘covered settlement agreement’ 

17 means a settlement agreement (including a consent 

18 decree)— 

19 ‘‘(A) that is entered into by an Executive 

20 agency; and 

21 ‘‘(B)(i) that— 

22 ‘‘(I) relates to an alleged violation of 

23 Federal civil or criminal law; and 

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1 ‘‘(II) requires the payment of a total 

2 of not less than $1,000,000 by 1 or more 

3 non-Federal persons; or 

4 ‘‘(ii) that— 

5 ‘‘(I) relates to the rule making process 

6 of the Executive agency or an alleged fail7 ure by the Executive agency to engage in 

8 a rule making process; and 

9 ‘‘(II) requires the payment of a total 

10 of not less than $200,000 in attorney fees, 

11 costs, or expenses by the Executive agency 

12 or entity within the Federal Government to 

13 a non-Federal person; 

14 ‘‘(2) the term ‘entity within the Federal Gov15 ernment’ includes an officer or employee of the Fed16 eral Government acting in an official capacity; 

17 ‘‘(3) the term ‘non-Federal person’ means a 

18 person that is not an entity within the Federal Gov19 ernment; and 

20 ‘‘(4) the term ‘rule making’ has the meaning 

21 given that term under section 551(5). 

22 ‘‘(b) INFORMATION TO BE POSTED ONLINE.— 

23 ‘‘(1) REQUIREMENT.— 

24 ‘‘(A) IN GENERAL.—Subject to subpara25 graph (B), the head of each Executive agency 

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1 shall make publicly available in a searchable 

2 format in a prominent location on the Web site 

3 of the Executive agency— 

4 ‘‘(i) a list of each covered settlement 

5 agreement entered into by the Executive 

6 agency, which shall include, for each cov7 ered settlement agreement— 

8 ‘‘(I) the date on which the par9 ties entered into the covered settle10 ment agreement; 

11 ‘‘(II) the names of the parties 

12 that settled claims under the covered 

13 settlement agreement; 

14 ‘‘(III) a description of the claims 

15 each party settled under the covered 

16 settlement agreement; 

17 ‘‘(IV) the amount each party set18 tling a claim under the covered settle19 ment agreement is obligated to pay 

20 under the settlement agreement; 

21 ‘‘(V) the total amount the set22 tling parties are obligated to pay 

23 under the settlement agreement; 

24 ‘‘(VI) for each settling party— 

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1 ‘‘(aa) the amount, if any, 

2 the settling party is obligated to 

3 pay that is expressly specified 

4 under the covered settlement 

5 agreement as a civil or criminal 

6 penalty or fine; and 

7 ‘‘(bb) the amount, if any, 

8 that is expressly specified under 

9 the covered settlement agreement 

10 as not deductible for purposes of 

11 the Internal Revenue Code of 

12 1986; and 

13 ‘‘(VII) a description of where 

14 amounts collected under the covered 

15 settlement agreement will be depos16 ited, including, if applicable, the de17 posit of such amounts in an account 

18 available for use for 1 or more pro19 grams of the Federal Government; 

20 and 

21 ‘‘(ii) a copy of each covered settlement 

22 agreement entered into by the Executive 

23 agency. 

24 ‘‘(B) CONFIDENTIALITY PROVISIONS.—The 

25 requirement to disclose information or a copy of 

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1 a covered settlement agreement under subpara2 graph (A) shall apply to the extent that the in3 formation or copy (or portion thereof) is not 

4 subject to a confidentiality provision that pro5 hibits disclosure of the information or copy (or 

6 portion thereof). 

7 ‘‘(2) PERIOD.—The head of each Executive 

8 agency shall ensure that— 

9 ‘‘(A) information regarding a covered set10 tlement agreement is publicly available on the 

11 list described in paragraph (1)(A)(i) for a pe12 riod of not less than 5 years, beginning on the 

13 date of the covered settlement agreement; and 

14 ‘‘(B) a copy of a covered settlement agree15 ment made available under paragraph (1)(A)(ii) 

16 is publicly available— 

17 ‘‘(i) for a period of not less than 1 

18 year, beginning on the date of the covered 

19 settlement agreement; or 

20 ‘‘(ii) for a covered settlement agree21 ment under which a non-Federal person is 

22 required to pay not less than $50,000,000, 

23 for a period of not less than 5 years, be24 ginning on the date of the covered settle25 ment agreement. 

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1 ‘‘(c) PUBLIC STATEMENT.—If the head of an Execu2 tive agency determines that a confidentiality provision in 

3 a covered settlement agreement, or the sealing of a covered 

4 settlement agreement, is required to protect the public in5 terest of the United States, the head of the Executive 

6 agency shall issue a public statement stating why such ac7 tion is required to protect the public interest of the United 

8 States, which shall explain— 

9 ‘‘(1) what interests confidentiality protects; and 

10 ‘‘(2) why the interests protected by confiden11 tiality outweigh the public’s interest in knowing 

12 about the conduct of the Federal Government and 

13 the expenditure of Federal resources. 

14 ‘‘(d) REQUIREMENTS FOR WRITTEN PUBLIC STATE15 MENTS.—Any written public statement issued by an Exec16 utive agency that refers to an amount to be paid by a 

17 non-Federal person under a covered settlement agreement 

18 shall— 

19 ‘‘(1) specify which portion, if any, of the 

20 amount to be paid under the covered settlement 

21 agreement by a non-Federal person— 

22 ‘‘(A) is expressly specified under the cov23 ered settlement agreement as a civil or criminal 

24 penalty or fine to be paid for a violation of Fed25 eral law; or 

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1 ‘‘(B) is expressly specified under the cov2 ered settlement agreement as not deductible for 

3 purposes of the Internal Revenue Code of 1986; 

4 ‘‘(2) if no portion of the amount to be paid 

5 under the covered settlement agreement by a non6 Federal person is expressly specified under the cov7 ered settlement agreement as a civil or criminal pen8 alty or fine, include a statement specifying that is 

9 the case; and 

10 ‘‘(3) describe in detail— 

11 ‘‘(A) any actions the non-Federal person 

12 shall take under the covered settlement agree13 ment in lieu of payment to the Federal Govern14 ment or a State or local government; and 

15 ‘‘(B) any payments or compensation the 

16 non-Federal person shall make to other non17 Federal persons under the covered settlement 

18 agreement. 

19 ‘‘(e) CONFIDENTIALITY.—The requirement to dis20 close information under subsection (d) shall apply to the 

21 extent that the information to be disclosed (or portion 

22 thereof) is not subject to a confidentiality provision that 

23 prohibits disclosure of the information (or portion there24 of). 

25 ‘‘(f) REPORTING.— 

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1 ‘‘(1) IN GENERAL.—Not later than January 15 

2 of each year, the head of an Executive agency that 

3 entered into a covered settlement agreement or that 

4 entered into a settlement agreement that involves 

5 regulatory action or regulatory changes during the 

6 previous fiscal year shall submit to each committee 

7 of Congress with jurisdiction over the activities of 

8 the Executive agency a report indicating— 

9 ‘‘(A) how many covered settlement agree10 ments the Executive agency entered into during 

11 that fiscal year; 

12 ‘‘(B) how many covered settlement agree13 ments the Executive agency entered into during 

14 that fiscal year that had any terms or condi15 tions that are required to be kept confidential; 

16 ‘‘(C) how many covered settlement agree17 ments the Executive agency entered into during 

18 that fiscal year for which all terms and condi19 tions are required to be kept confidential; 

20 ‘‘(D) the total amount of attorney fees, 

21 costs, and expenses paid to non-Federal persons 

22 under settlement agreements (including consent 

23 decrees) of the Executive agency during that 

24 fiscal year; and 

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1 ‘‘(E) the number of settlement agreements 

2 (including consent decrees) between the Execu3 tive agency and non-Federal persons that in4 volve regulatory action or regulatory changes, 

5 including the promulgation of new rules, during 

6 that fiscal year. 

7 ‘‘(2) AVAILABILITY OF REPORTS.—The head of 

8 an Executive agency that is required to submit a re9 port under paragraph (1) shall make the report pub10 licly available in a searchable format in a prominent 

11 location on the Web site of the Executive agency.’’. 

12 (2) TECHNICAL AND CONFORMING AMEND13 MENT.—The table of sections for chapter 3 of title 

14 5, United States Code, is amended by adding at the 

15 end the following: 

‘‘307. Information regarding settlement agreements.’’. 

16 (b) REVIEW OF CONFIDENTIALITY OF SETTLEMENT

17 AGREEMENTS.—Not later than 6 months after the date 

18 of enactment of this Act, the Comptroller General of the 

19 United States shall submit to Congress a report regarding 

20 how Executive agencies (as defined under section 105 of 

21 title 5, United States Code) determine whether the terms 

22 of a settlement agreement or the existence of a settlement 

23 agreement will be treated as confidential, which shall in24 clude recommendations, if any, for legislative or adminis25 trative action to increase the transparency of Government 

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1 settlements while continuing to protect the legitimate in2 terests that confidentiality provisions serve. 

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Union Calendar No. 476 

114TH CONGRESS 

2D SESSION S. 1109 

[Report No. 114–613] 

A BILL 

To require adequate information regarding the tax 

other purposes. ments entered into by Federal agencies, and for treatment of payments under settlement agreeJUNE 9, 2016 

Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 

mstockstill on DSK3G9T082PROD with BILLS